3.02.2006

That old Bush magic

Congratulations go to Professor Randall Kroszner, recently sworn in Governor of the Federal Reserve Board, which is responsible for setting interest rates in the US, and by proxy, impacting the rest of the planet (except maybe some remote fishing villages in North Korea). A first rate economist and expert on prevailing models of monetary supervision and central bank governance around the world, keep an eye on this guy for future success. Having sat in his class at Chicago and knowing his strong belief in Central Bank independence, I am confident that he will be no Bush administration poodle.

Kevin Warsh, 35, has also been approved by the Senate to sit on the Fed Board. This is another one of those strange Bush appointees of someone whose cv just doesn't meet the basic requirements for the job, as Lotterman describes here.

If you're looking to play spot the political nominee, I'll give you a clue. Imagine how ridiculous it would be to nominate a trained economist to the Supreme Court. It gets better...post-Harvard law school, this guy worked for Morgan Stanley for 7 years as an M&A lawyer providing advice to technology companies. So, to sum up, a trained lawyer, 7 years banking experience looking after his wallet during the tech wreck and 4 years in a White House admin role. In another life he'd be lucky to get a job helping George Bailey run your local Savings and Loan. Those of you that think you might be cut out for a similar career can apply here.

Meanwhile, more moves are afoot at the Fed. Vice-Chairman Roger Ferguson has resigned, presumably because he's not a big fan of the sort of transparent, inflation targeting regime that Chairman Bernanke will now look to establish. It's a little known fact that he was in charge on 9/11 and his prompt action prevented the markets and economy from descending into general chaos and freefall. It is understood that the short list to replace him includes experienced lawyers Harry Whittington, Lionel Hutz and Bush's good friend Tweetie Pie.

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